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BY: MARJUN R. ABOG,
MM-BM
• Strategic marketing vs. tactical marketing

• Marketing environment

• Marketing research

• Consumer and organizational markets Performance:

Conduct a mini-marketing research,
interpret market buyer behavior and
• Segmentation, targeting, and positioning identify the target market.
The Strategic Marketing Process

The strategic marketing process seeks to

establish a clear and concerted direction for all
marketing activities of an organization. It
includes plans to reach specific
goals/objectives.

The strategic marketing process is

depicted in the following diagram:
 Mission Situation Objective
identification analysis setting

Strategy Marketing
evaluation and strategy
control development
Step 1: Mission identification

The company’s mission statement is

articulated. A mission statement defines what an
organization is, why it exists, its reason for being,
its primary customers, the products and services it
produces, and its geographical area of operation.

For example (CLICK),

 Example:

An international consumer goods company’s

mission statement is “to provide branded products and
services of superior quality and value that improve the
lives of the world’s consumers. As a result, consumers
will reward us with industry leadership in sales, profit,
and value creation, allowing our people, shareholders,
and the communities in which we live and work to
prosper.”
Step 2: Situation analysis

This step assesses and evaluates the

market, customers, competitors, and the
company’s internal and external
environment. The objective is to identify the
company’s strengths and weaknesses, as
well as the available opportunities and
possible threats.
Step 3: Objective setting

Objective setting are marketing target that

are Specific, Measurable, Attainable, Realistic,
and Time-bound (SMART). These enable a
company to control its marketing plan and provide
a consistent focus for all functions of an
organization. These objectives include sales
revenues, market, share, and profits. They are
used as basis for strategy selection and
development.
Step 4: Marketing strategy development

The development of a marketing strategy

involves market segmentation, identification of
target market, positioning, selection of broad
marketing strategies, and the translation of
strategies into action plans.
Strategies can be broadly classified into
three categories. These are cost leadership,
differentiation, and focused.
(Authors’ note: Examples are hypothetical and for academic purposes only.)

• Cost leadership

This is a strategy primarily for achieving low cost

leadership among industry competitors. Cost leadership can
be achieved through low cost supply contracts, overhead
expense control, economies of scale, and comprehensive
cost-cutting efforts, among others.

Example: While 16” desk fans ordinarily retail for ₱1,000.00, a

local appliance brand is able to market the same at ₱635.00 through
mass production.
• Differentiation

Differentiation seeks to achieve superior product

attributes and features that are different from industry
competitors. This results in pronounced consumer
preference for the company’s products.

Example: A mobile phone brand introduces its version of the

smartphone that does not have a keyboard but is activated and
controlled by thought.
• Focused

Efforts are concentrated on a relatively small but

profitable market. The development of products and
services primarily ensures that the needs and wants of this
market are addressed and that satisfaction is provided.

Example: A convenience store that concentrates on the very

high-end niche market by converting its operations into
convenience stores with superior customer service, selling purely
imported and high quality products and gourmet food prepared by
resident chefs.
Cost leadership, differentiation, and focused strategies
may be implemented through the following sub-categories of
strategies:

1. Forward integration

This involves gaining ownership or increased control

over distributors or retailers.

Example: A known newspaper company buying 418

newspaper stands in Metro Manila.
2. Backward integration

This involves gaining ownership or increased control

over suppliers.

Example: A consumer goods company in the

Philippines purchasing a cow farm and diary facility in
General Santos City.
3. Horizontal integration

This involves purchase of or increased control over

competitors.

Example: A pizza company buying a controlling interest

in another pizza company.
4. Market penetration

The objective of this strategy is to increase market

share of current products or services in current markets
through greater and more intensive marketing efforts.

Example: A doughnut company launching a ₱56 million

advertising campaign directed at current customers.
5. Market development

This strategy involves the introduction of existing

products or services into a new geographical area or
market.

Example: A private learning institution opening a

campus in Cebu City.
6. Product development

This strategy involves the improvement of current

products or services or the development of new
products with the purpose of increasing sales.

Example: A company on carbonated beverages

introducing its product line in tetra pack.
7. Related diversification

This involves introducing new but related products or

services.

Example: Battery manufactures introducing solar

powered automotive batteries.
8. Unrelated diversification

This involves introducing new but unrelated products

or services.

Example: A bank opening a chain of ice cream parlors.

9. Retrenchment

This involves halting or reversing declining sales and

profits through cost or asset reduction.

Example: A shopping mall selling off its hardware

department and laying off 847 of its department store
employees.
10. Divesture

This involves selling a division or part of an

organization.

Example: A conglomerate selling a airline.

11. Liquidation

This involves selling all of a company’s assets, in

parts or as a whole, for their tangible worth.

Example: A prime holdings company selling all its

companies.
Step 5: Strategy evaluation and control

After the strategy is developed, periodic

monitoring and evaluation are needed. This
is necessary to identify deviations and make
necessary adjustments and corrections.
The Tactical Marketing Process

Complementing the strategic marketing

process, the tactical marketing process
determines the means or tactics to implement the
strategies. It involves the identification of specific
activities, time tables, responsibilities, and
budgets and their implementation. The objective is
to ensure that the strategies are implemented
successfully.
For example, a company determines to increase
sales by 10% by he end of the calendar year.
After careful consideration, it selects market
penetration as its strategy. The current task is to
identify the tactics, or activities that it should
undertake to ensure that the strategy will be
successful. The firm may decide to increase
selling prices. It may opt to do intensive
promotions, or it may invest in heavy
product advertising.
The Tactical Marketing Process

Marketing Action Plans/ Marketing

Strategies Tactics Activities

Activity Responsibility/ Activity

Budgets Accountability Timetables

Monitoring
and
Control
Once the tactics and activities are identified,
they are developed into an action plan.

Action plan – a sequential series of

marketing activities. It includes timetables
for each activity, pinpointed responsibilities or
accountabilities for each, and the corresponding
budgets. Oftentimes, it is necessary to utilize two or
more action plans to ensure successful
implementation. These are monitored regularly to
ensure effectiveness.
The Marketing Micro-environment

The marketing micro-environment includes

forces that are internal to the company or those
that are relevant to its operation. It is composed
of the company itself, its suppliers, market
intermediaries, customers, competition, and
its various publics. The consideration of these is
important as they affect the company’s ability to
build and maintain sustainable relationships with
current and prospective customers.
1. The Company
Marketing may be the “lifeblood” of an organization, but it
cannot exist independently of other organizational functions. These
functions include research and development, finance, operations
and human resources.
2. Suppliers
Suppliers provide raw materials, utilities, labor, capital, and
equipment. The availability and prices of these supplies should be
monitored. Effective partnership or relationship management with
suppliers is essential.
3. Market Intermediaries
Intermediaries are channels that link the organization to its
customers. Most products are delivered and distributed to
customers through intermediaries.
4. Customers
Customers create the demand for products and services. They
can either be customers or end-users, businesses, or organizations.
Companies must attract and maintain customers through products
and services that meet and exceed customer expectations.
5. Competition
The demand for a company’s product or services is affected
by the nature and intensity of competition. Knowing a competitor is
critical to the success of the firm. Monitoring the movements of
competitors is essential because competition is not static and is
very volatile.
6. Publics
Publics may include any individual or entity with an actual or
potential interest in the company and its products or services. These
include the shareholders, the community, financial institutions,
media, the government, and society.
Identifying Strengths and Weaknesses

Strengths and weaknesses can either be

controllable or uncontrollable. The factors present
within the company are within the firm’s control. The
five other forces ( suppliers, market intermediaries,
customers, competition, and the various publics) are
essentially uncontrollable although they are within
the sphere of the company’s influence.
 In business, the macro-environment
represents economic, politico-legal, socio-cultural,
demographic, technological, and natural
environments. Although there are many, only the
factors that are directly relevant are considered.
The factors that indicate some level of uncertainty
and may affect the organization (depending on the
nature of the business and product or service
offering) are evaluated.
Marketing Macro-environment
1. Economic Macro-environment
The economic macro-environment represents economic
factors that can directly affect an organization. Examples of these
are inflation rate, foreign exchange rates, consumer spending
shifts, and consumer price index, among others.

2. Politico-legal Macro-environment
The politico macro-environment includes both political and
legal factors. A highly uncertain political situation, such as an
impending national election, may affect the stability of businesses.
3. Socio-cultural Macro-environment
Each geographical area has a specific culture that dictates
how business is conducted. Culture is defined as the beliefs,
customs, arts, etc., of a particular society, group, place, or time.

4. Demographic Macro-environment
A company’s demographic macro-environment consist of
changes in population characteristics. These include population
rate, gender, age, income composition patterns, civil status, and
family size.
5. Technological Macro-environment
The technological macro-environment is composed of current
and impending technological change. This is sometimes the single
factor that can cause the rapid acceleration or bring about the
untimely demise of products, services, or companies.
5. Natural Macro-environment
The natural macro-environment refers to natural resource
inputs and environmental concerns. The uncontrolled use of finite
natural resources including fossil fuel in organizational activities
has heightened concern for the sustainability of the natural
environment.
Identifying Opportunities and Threats

After relevant economic, politico-legal,

socio-cultural, demographic, technological, and
natural-macro-environmental factors have been
identified and analyzed, the company shall now
proceed to identify threats or opportunities
among these factors.
 Marketing research is a function under a
business organization’s Marketing Information
System (MIS). MIS is primarily responsible for the
gathering, analysis, and timely distribution of
information for the use of marketing decision makers.

Marketing research is the function responsible

for acquiring and evaluating market and consumer-
based information for decision making and the
determination of marketing strategic direction.
The following are some of the issues that can be
addressed by marketing research:
• Identify viable new products and services
• Enable risk reduction
• Identify market opportunities and threats
• Determine the level of customer satisfaction
• Pinpoint and anticipate market trends or changes
• Decide on the best advertising medium
• Pre-test and post-test advertising and promotional campaigns
• Evaluate the results of test marketing
• Evaluate the results of packaging, brand name, and label testing
• Determine consumer price awareness and sensitivity
• Undertake location studies
 Steps in the Marketing Research Process
Research Problem/ Establishment Research
need opportunity of research design
determination definition objectives determination

Sample size and Data Determination of Information

Sampling plan Collection data access sources/types
determination forms design methods identification

Report
Data Data
preparation and
collection analysis
presentation
Step 1: Research need determination

This initial step in marketing research process is

necessary in order to save effort, time, and cost. The
problem situation has to be assessed initially to
determine if marketing research is needed at all.
Step 2: Problem/opportunity definition

Both problems and opportunities can be subjects

of marketing research. However, to set the general
research direction and operational parameters, the
problem/opportunity must be defined precisely.
Step 3: Establishments of research
objectives

The purpose of research objectives is to gather

precise information to address information gaps. Aside
from being specific, research objectives must be clear,
detailed, and operational.
 Step 4: Research design determination
At this step, methods and procedures for the
collection and analysis of information must be
determined. There are four major types of marketing
research designs:

• Observational – social phenomenon is observed in

its natural setting, and observation can be made at
any one time or regularly within a period of time.
• Experimental – includes laboratory experiments
and test marketing. Results from two sets of
samples are compared.

• Qualitative – includes focus groups, in-depth

interviews, and projective techniques. This type of
research uses only a small number of respondents.
Thus, results are not reflective of the general
population
• Quantitative – one example of this type of research
is the use of surveys. It is used to test observations.
The number of respondents is relatively large and
randomly selected, and the results are generally
reflective of the population.
Step 5: Information source/type
identification

The two basic types of information utilized in

market research are primary and secondary
information.

• Primary information refers to data gathered by the

researcher himself/herself for the specific research
problem.
• Secondary information is information acquired from
previously conducted researches, journals, periodicals,
and other similar sources.
Step 6: Determination of data access
methods

One of the most popular ways of data access in

consumer surveys is through person-administered
surveys. This could either be administered through
face-to-face or telephone interviews.
Step 7: Data collection forms design

The survey questionnaire, which is the most

common form used in data collection, must be
carefully and meticulously prepared. A typical survey
questionnaire has the following major parts:

• Introduction
• Screening
• Core
• Classification
Step 8: Sample size and sampling plan
determination

In order to achieve 100% accuracy in the

conduct of consumer surveys, it is ideal to give
questionnaires to every member of the target
population. This type of survey is called a census.
Sample Problem:
Use Slovin’s formula to find out what sample of a population of 1,000 people you need to
take for a survey on their network preferences.
After the sample size has been calculated, the sampling plan is determined.
Sampling methodology can either be non-probability sampling or probability-
based.

These are types of non-probability sampling:

• Convenience sampling
• Judgment sampling
• Referral sampling
• Quota sampling

Some types of probability sampling methods are:

• Simple random sampling
• Systematic sampling
• Cluster sampling
• Stratified sampling
Step 9: Data collection

This is the stage I the process where the

questionnaires are administered to the selected
respondents. Although a seemingly mechanical step,
some problems may arise in data collection such as:
field worker errors, break offs, item omission, or
when a respondent refuses to be a participant in the
survey.
Step 10: Data analysis

At this stage, collected data is summarized and

generalized. The differences and relationships
between and among data are determined. Some
common statistical tools used in data analysis are
percentage, mean, range, and standard deviation,
hypothesis tests, confidence interval, percentage and
mean difference tests, cross tabulation, correlation,
and regression analysis.
Step 11: Report preparation and
presentation

The last step in the marketing research process

is the preparation and presentation of the report
findings, interpretations, conclusions, and
recommendations to marketing decisions makers.
Making marketing research-based decisions
Marketing research reports include a lot of
information that can aid organizations in
making effective marketing decisions, rather
than resorting to unsupported “gut feel”
decisions.
 Some examples of reports and the marketing
decisions they can support are:

 External factor  Observation

 Test marketing
research research

 Concept, product
 Target market
development, and  Pricing tests
studies
product studies

 Advertising pre-  Usage, attitude,

 Location studies
and post-testing and image studies
Consumer markets
Consumer markets include individuals and/or
households that purchase products and services for
personal consumption.

Consumer buying process

The consumer buying process outlines the steps a
consumer goes through when buying a product/service. It
is important for marketers to know this process to
understand how consumers buy.
Consumer buying process

Need/problem Information Alternatives

recognition search evaluation

Post - purchase Purchase

behavior decision
Step 1: Need/Problem recognition

This initial step in the consumer buying

process is the most important of all because the
failure of a consumer to recognize a ned or problem
will not result in any sale.
Step 2: Information search

After having recognized the need or problem,

the consumer will search for ways (various brands
of products or services) to address the need or
solve the problem.
Step 3: Alternatives evaluation

At this point, the consumer compares the

attributes, features, and selling prices of the various
brands or products or services capable of
addressing his/her recognized need or solving
his/her problem.
Step 4: Purchase decision

After evaluating the brands of product/service

that will best address his/her need or solve his/her
problem, and provide the highest value, the
consumer shall proceed to make the purchase.
Step 5: Post – purchase behavior

After the purchase, the consumer shall make

a judgment of the product/service’s ability to satisfy
his/her recognized need or problem (which
triggered the buying process).
Consumer buying roles

 Initiator

 User  Influencer

 Buyer  Decider
Consumer markets and buying behavior

Marketing Consumer Purchase

Inputs Decision

• Product • Product choice

• Price • Brand choice
• Place • Location choice
• Promotion • Purchase timing
Psychological • Purchase amount
Inputs • Purchase
frequency
• Culture
• Attitude
• Learning
• Perception
Buyer characteristics comprise of cultural, social, personal,
and psychological factors.
A very useful guide to buying propensity was developed by William D.
Wells and George Gubar – the nine stages of a family’s life cycle.
The author have modified it to fit to the Philippine context.

Stage 1: Bachelor/bachelorette stage – They are highly dependent

on their parents for finances in the form of allowances.

Stage 2: Young, newly married couple with no children – Most

have dual income as both spouses may be working.
Stage 3: Married couple, with eldest child below elementary school
age – They may be renting their living facility or still staying with
parent/in-law.

Stage 4: Married couple, with youngest child six tears old or over –
They spend primarily on school tuition, uniforms, books, and
allowances.

Stage 5: Older married couple, family head still working, all

children living on their own – They have increased savings as
result of reduced financial requirements.
 Stage 6: Widow/widower, in labor force – They have substantial
savings.

Stage 7: Widow/widower, retired – Pensioner. They may be asked

to move in by one of their adult children for better care.
Most individuals purchase products and services in order to satisfy one
or more of the five need levels identified by Abraham Maslow.
Perception is the process by which people translate sensory
impressions into a coherent and unified view of the world
around them.

Three Perceptual processes guide an individual’s perception:

• Selective attention – because consumers are exposed to

hundreds of commercial messages each day, they tend to
pay attention to only those that address a current need.
• Selective distortion – pertains to the tendency of
individuals to twist or “distort” information to fit their existing
mindset toward a brand.

• Selective retention – means that consumers tend to

remember only the positive things that reinforce their
attitudes and beliefs.
Organizational markets
Organizational markets are all the individual companies that
purchase goods and services for some use other than personal
consumption. There are three types of organizational markets:

Resellers

Industries Government
Types of organizational buying decisions
Organizational
Buying
Roles
Organizational segmentation variables

Industry Organizational
affiliation size

Geographic End – use

location application
Organizational Buying Behavior

• There are far less organizational accounts than consumer accounts

• Organizational accounts are more concentrated geographically
• The volume of products and services organizations buy are much larger than
consumer markets
• The buying decision and processes of organizational buyers are more structured
• The buying decision of organizational accounts involves a lot of negotiation and
takes much longer to complete
• Organizations normally buy on extended payment terms
• Organizational markets purchase are more rational and less emotional
• There are many participants playing different roles in the organizational buying
process, most of them possessing highly specialized capacities
• Because organizations place larger orders and are fewer, firms usually establish
close relationships with these organizations.
• Organizational markets have access to more information regarding
products/services.
 Market segmentation is the process of dividing the market
into homogeneous parts or groups.
 A target market refers to a group of potential
customers to whom a company wants to sell its products
and services. This group also includes specific customers
to whom a company directs its marketing efforts. A target
market is one part of the total market for a good or
services.
The target market should ideally be:

• Financially capable – must have the financial means to

afford the purchase price of the product/service.

• Reachable – must be within physical reach to permit

product distribution.

• Homogeneous – must react similarly to specific marketing

stimuli.
 Positioning is the process of communicating the image
of a brand into the minds of consumers. The objective is to
make the brand stand out in comparison to its competitors.
Elements of a good brand position
What is a good brand decision? There are three requirements:

• Unique – A brand must select a position that is not currently

occupied by another brand.

• Beneficial – The selected position must be perceived by its

customers as beneficial.

• Credible – Once a brand position is selected, it must ensure

that it performs and fulfills the promise of its position.
Perceptual mapping
Perceptual mapping involves the identification of a
competitive brand’s position using two variables or axes.
Communicating brand position
The brand position of a product/service must be
consistent and communicated effectively to its target market.
It is pointless to adopt a brand position if it is known only to
the company’s executives
and employees.
Some of the elements to be considered in communicating brand
positioning are:

Packaging Labeling Selling price

Advertising Brand endorser Tagline

Identifying and selecting competitive advantage
Competitive advantage is defined as the superiority
of an organization over its competitor. It typically answers
the question “Why should the customer purchase from this
company instead of its competitors?”
There are three major types of competitive advantage:
• Cost advantage – results when a firm has the ability to produce
a product or services at a lower cost compared to its
competitors.

• Differential advantage – when a company’s product or service

differs from its competitors and are perceived by consumers to
be better or of greater value.

• Focus advantage – when a company knows its target market

very well, and can service its needs better than any of its
competitors.